Gemini, Genesis and DCG Present Recovery Plan for BTC and ETH – Is the Cryptocurrency Market Safe Now?

Gemini, Genesis and DCG Present Recovery Plan for BTC and ETH - Is the Cryptocurrency Market Now Safe? - Gemini creditors committee presents plan for.jpg@pngThe contagion generated by the collapse of cryptocurrency exchange FTX has sent shockwaves throughout the sector, affecting several companies in the cryptocurrency market. Following the FTX crash, cryptocurrency lender Genesis has faced massive withdrawals on the platform, leaving its parent company Digital Currency Group (DCG) struggling.

Genesis' liquidity crisis also impacted Gemini exchange, which was operating a revenue program with the cryptocurrency lender. In a recent development, Gemini's creditors committee unveiled a plan to "provide a pathway for asset recovery." Gemini co-founder Cameron Winklevoss said in the announcement:

Houlihan Lokey today filed a plan on behalf of the creditors' committee to resolve Genesis and DCG's liquidity issues and provide a path for asset recovery.

This plan is based on information received thus far from Genesis, DCG, and their respective advisors. The Creditors' Committee expects an initial response this week.

As mentioned, cryptocurrency exchange Gemini partnered with Genesis last year, in February 2021, to launch the Gemini Earn program. This program offered 7,4% interest on customer deposits. Last month, however, the Gemini exchange suspended withdrawals by freezing Gemini Earn funds.

Cryptocurrency lender Genesis currently owes $1,8 billion in total debt to the credit group. Of that, 50%, or $900 million, is owed to cryptocurrency exchange Gemini alone. In late November, Gemini said it worked with Genesis and DCG to recover customer funds.

Gemini faces a data breach

While Genesis was already trying to clear the liquidation hurdle, the cryptocurrency exchange suffered a massive data breach last week that leaked the emails of 5,7 million customers. The leak involved the email addresses and partial phone numbers of Gemini customers.

However, cryptocurrency exchange Gemini responded promptly to the developments, adding that the data leak was caused by a third party. In its blog post, the cryptocurrency exchange noted that:

Some Gemini customers have recently been subjected to phishing campaigns which we believe are the result of an incident at a third party vendor. This incident led to the collection of partial email addresses and phone numbers of Gemini customers.

However, Gemini clarified that no account data or systems were affected as a result of this third-party intervention. He also stated that all client funds and accounts remain safe and secure.

Like other cryptocurrency exchanges that faced the fall of FTX, Gemini also faced negative market sentiment. With the fall of the FTX exchange, most investors have moved their funds away from the exchanges.